Why is gold heading for a weekly decline despite rising geopolitical tensions between the U.S. and Iran?

Gold is heading for a weekly decline because escalating U.S.-Iran tensions are fueling inflation concerns and reinforcing market expectations of further U.S. Federal Reserve interest rate hikes — which makes gold, a non-yielding asset, less attractive; spot gold was up 0.2% on Friday but still on track for an over 1% weekly fall, as higher rate expectations outweigh its traditional role as an inflation hedge.

How has the recent escalation in U.S.-Iran Gulf strikes affected market expectations for Federal Reserve policy?

The latest round of U.S.-Iran strikes has reinforced the probability of a Fed rate hike this year, with markets pricing in a 64% chance of a September hike — up from around 54% a week earlier — according to CME's FedWatch tool, reflecting heightened inflation fears triggered by the conflict.

Gold heads for weekly drop as Gulf attacks reinforce rate-hike bets

Jul 9, 2026

Gold faces a weekly decline as U.S.-Iran tensions fuel inflation fears and Federal Reserve rate-hike expectations, prompting HSBC to lower long-term forecasts. Oil prices rose on strike concerns, while other precious metals also tracked downward weekly.

reuters

2026-07-09

Gold heads for weekly drop as Gulf attacks reinforce rate-hike bets

Gold heads for weekly drop as Gulf attacks reinforce rate-hike bets

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